Legislative Update

Tuesday, August 19, 2014
August 19, 2014 Legislative Update

Lawmakers Wrap Up Work for Official Adjournment

Almost three weeks since the General Assembly “left” Raleigh the House and Senate continue to debate the terms of an official adjournment resolution. The Senate moved forward with its exit plan convening last Thursday, August 14. The Senate passed a bill making a budget correction that allows school districts to go through the current year without cutting teacher assistant jobs. However, the Senate made the correction contingent on the passage of HB1224, a measure that creates a new incentive fund for the Department of Commerce, along with other incentive measures and limitations for local governments to levy additional sales taxes. House Speaker Thom Tillis said he had spoken to the Senate about the incentives and budget-fix bills but was not certain what the House will do with them.

The House, before leaving for the weekend, voted to not bring up HB1224 up for a vote. Following the Senate’s passage of the budget correction for teacher assistants, the House linked a third bill (HB189) contingent on the passage of HB1224, providing certain counties the options to hold a referendum in 2016 on a .25 percent sales tax increase. The tying of a third bill to the scheme of HB1224 essentially reverses provisions that would have prevented Wake County’s option to levy a quarter-cent sales tax to raise teacher salaries. Provisions within HB1224 allows counties to exercise the quarter-cent tax option if used before the end of 2014, but Wake County has said it was too late to consider the option this year. HB189 provides another two years for counties to offer a referendum.

With the measures in limbo, the legislative session will not officially adjourn until at least Tuesday. The House was scheduled to go back into session Monday afternoon where HB1224 and HB189 are scheduled to be debated within the House Rules Committee.

Before leaving on Friday, the Senate also passed three alternative adjournment resolutions. One resolution would have the legislature end its business this year and not return until next year. The second resolution would have the legislature leave until November, when members would come back to consider a Medicaid overhaul. The third would have members leave until November 17, when they could return to consider Medicaid, bills connected to lawsuits and confirmation of special Superior Court judges, and coal ash regulations. Tillis said late last week that when House members vote to officially end the session, they will vote to adjourn until 2015, voting down a special session in November. Depending on the outcome of the adjournment resolution, the issues of Medicaid reform and coal ash may not be taken up until the new legislative session in January 2015.

Regulatory Reform Package Headed to Governor’s Desk

One item the House and Senate agreed upon last week was an updated regulatory reform package. Both the House and Senate passed SB734, Regulatory Reform Act of 2014, which contains wide-ranging provisions, primarily focused on environmental regulations. Provisions include:

  • State Regulations: Bans regulators from passing any rules more stringent than federal minimum standards without the approval of state lawmakers.
  • Community Colleges: Sets up training programs for beer brewing and allows community colleges to have beer at campus events.
  • Isolated Wetlands: Authorizes developers to pave or build upon wetlands of up to 1 acre east of Interstate-95.
  • Environmental Management Commission: Prohibits the commission from defining gravel with relation to stormwater rules.
  • Venus Flytraps: Establishes the poaching of Venus flytraps a felony.
  • Park Speed Limits: Allows state officials to waive the 25 mph speed limits that apply in state forests and parks for special events.

 

 

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, August 11, 2014
August 11, 2014 Legislative Update

General Assembly Adjournment Uncertainty…

Although lawmakers have not convened for any further business since passing the budget last week, House and Senate leaders have still not agreed upon a final adjournment resolution. The Senate version of the adjournment resolution calls for a two-day session on August 14, where they could consider any General Assembly appointments or reconsideration of any legislation the Governor vetoed. The House version of that same adjournment resolution calls for an August 14 session as well, but with a much more substantial list of matters that could be considered, including: coal ash legislation, any bills relating to environmental and natural resources laws, regulatory and administrative reforms, autism spectrum disorder insurance coverage, technical and other changes to revenue laws, or to the confidentiality of unemployment compensation information.

Until legislative leaders of both chambers come to an agreement on an adjournment resolution, including the August 14 session, both chambers will reconvene every four days for non-voting “skeleton” sessions, as required by the state constitution until they officially adjourn. The Senate has publicly said that since the budget has become law, they do not plan to reconvene again until November for the previously agreed-upon Medicaid reform session, while House leaders have publicly stated that they still plan to reconvene for the August 14 session to take up substantive measures.

Both the House and Senate versions of the adjournment resolution also called for the legislature to reconvene on Monday, November 17, 2014, to work on Medicaid reform. The Senate version also called for the coal ash legislation to be taken up again at the November 17 session, while the House version wants to get the coal ash legislation figured out during the August 14 session.

A “side effect” of the chambers not coming to an agreement on an adjournment resolution is that House and Senate members are prohibited by law from accepting any campaign contributions while they are in session. Until an adjournment resolution is agreed upon, legislators cannot accept any contributions or hold any fundraisers, which could be an issue for legislators with tough general election races coming up on November 4.

Right now there continues to be much confusion and uncertainty among when the legislature will reconvene, what kind of measures will be considered, and when they will officially sine die for the biennium.

Governor Signs Budget into Law

On Thursday (8/7) Governor McCrory signed the $21.1 billion budget, SB 744, Appropriations Act of 2014, into law. The 260-page bill includes the average seven percent raise for public school teachers and the $1,000 raise for most state employees. Governor McCrory released a statement saying that the budget “reflects a pragmatic and thoughtful approach to managing taxpayer dollars. It provides raises for our teachers, highway patrol officers, court employees and a cost of living increase for retirees and preserves Medicaid eligibility standards. This budget will continue to fuel North Carolina’s economic comeback.”

Governor’s Chief Budget Advisor Resigns

Governor McCrory’s Chief Budget Advisor, Art Pope announces his resignation last week. He took the job at the start of the Governor’s terms  in 2013 with the understanding that he would serve one year, but the Governor asked him to stay for another budget cycle. McCrory credited Pope for his outsized role in the administration, describing how he offered legal guidance to his chief attorney, lobbied lawmakers and helped craft policy decisions in addition to his role guiding the state's spending.

A former community bank director and recent appointee to the N.C. Banking Commission will take over as state budget director next month. Gov. Pat McCrory announced last week that Lee Roberts will succeed Art Pope. Roberts, 45, is the former managing director of Piedmont Community Bank Holdings in Raleigh and was executive vice president and chief operating officer of VantageSouth Bancshares. Roberts also founded a real estate investment and advisory firm called Coley Capital, and has worked for Morgan Stanley & Co. and Cherokee Investment Partners and as an associate with Akin, Gump, Strauss, Hauer & Feld.

Governor Signs Wide Array of Bills into Law

Last week the Governor signed several bills into law, including the Appropriations Act of 2014. As of today, one bill remains on Governor McCrory’s desk for final approval – HB 133, Technical and Other Changes.

SB 648, NC Commerce Protection Act of 2014: Creates transparency in contracts between the NC Attorney General and private attorneys, prevents the abuse of patents, allows for shareholder assent to exclusive forum, and limits asbestos-related liabilities for certain successor corporations.

SB 853, Business Court Modernization: Modernizes the business court process by making various changes to the procedures of complex business court cases and streamlines the process of corporate reorganization utilizing holding companies.

HB 1145, Registration for Mopeds: Requires all mopeds to be registered with the NC Division of Motor Vehicles and calls for a legislative interim committee to study whether additional statutory changes are needed, including whether insurance should be required in order to drive a moped.

 

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, August 4, 2014
August 4, 2014 Legislative Update

Lawmakers Leave Raleigh With Official Adjournment Uncertainty….

The House and Senate finalized the $21 billion spending plan, which normally signals the adjournment of the General Assembly’s “short” session. But with the Senate and House offering two different versions of adjournment resolutions, it is unclear when the General Assembly will adjourn the session.

The Senate approved its adjournment resolution shortly after midnight on Thursday, July 31, after passing the budget and concurring on several measures that were being negotiated out in conference committees. On Saturday morning, August 2, the House followed, finalizing the budget but putting forward a different adjournment resolution. The major difference between the two resolutions is that the House wants to deal with the pending coal ash legislation and other unresolved bills in August while the Senate would push the issue of coal ash to after the November elections. The House also wants to return in two weeks to resolve other legislation, including economic development incentives and regulatory reform.

Until the adjournment impasse is resolved, the House and Senate will hold “skeleton sessions” with no legislation being moved until August 14 at the earliest, the 10-day timeline for the governor to veto any bills. Both the House and Senate have agreed to hold a November session after the elections to deal with Medicaid reform.

House and Senate Pass Budget, Governor to Sign

After more than a month of contentious negotiations between House and Senate leaders over the $21 billion budget for fiscal year 2014-2015, which began on July 1, a compromise was met with the House, Senate and governor. The House voted 66-44 and the Senate voted 33-10 to give final passage to the budget. The governor is expected to sign the budget into law early this week. Highlights include:

Education:
The budget will provide teachers with a 7 percent pay raise and retention of teacher assistants. The pay raises will boost starting teacher salary to $35,000 over two years and give most state employees $1,000 raises and five additional vacation days.

  • UNC: Maintains funding for the University of North Carolina system. Increases the management flexibility cut by $2.4 million to $76 million. Provides $3 million for “game-changing” research.
  • Master’s Degrees Program: Discontinues the program that offers supplemental pay, though those who already have a degree or who have already started coursework will continue eligibility.
  • Community Colleges: Provides a $1,236 increase in salary and benefits. Increases tuition by 50 cents per credit hour to $72 for in-state and $264 for out-of-state.
  • Pay Schedule: Replaces the 37-step pay schedule with a six-step system.
  • K-1: Spends $42 million to guarantee funding for one teacher per 18 students in kindergarten and one teacher per 17 students in first grade.
  • Department of Public Instructions: Reduces budget by 10 percent, or $5 million a year.

Medicaid:
Reduction of $135 million. Preserves current levels of eligibility for Medicaid benefits

Transportation:

  • DMV: Hires 14 more driver’s license examiners at the Division of Motor Vehicles offices and authorizes additional DMV funds to produce a new-format driver’s license and allows online renewal.
  • Taxi Tax Refund: Repeals the refund of the state gas tax to taxi drivers, effective in July 2015.
  • DOT Outsourcing: Outsources pre-construction activities.
  • DOT Board: Calls for a study of privatization, sponsorships and fees.

MISC:

  • Lottery: Establishes a legislative oversight committee to examine lottery operations and recommended changes.
  • Drones: Prohibits the use of drones until December 2015 without special permissions. Establishes regulations and penalties for drone use.
  • UNC: Requires a study of various aspects of tuition fees at University of North Carolina institutions.
  • Medicaid: Establishes the intent of the General Assembly to work on Medicaid reform during a special legislative session in November 2014.
  • Film: Creates a $10 million grant program for film production companies within the Department of Commerce to replace the existing film tax credit in the first half of 2015.

Coal Ash Negotiations Stall and Governor Signs Executive Order

The House and Senate were unable to come to agreement on the coal ash legislation before “leaving” after they approved the budget. The major point of contention dividing the House and Senate is a provision that prioritizes which coal ash ponds are deemed low risk and subject to less stringent regulation. In addition, among the differences between the House and Senate bills are how many members the governor and the legislature would appoint to a newly created Coal Ash Management Commission.

After an earlier announcement that House and Senate conferees could not come to an agreement on SB 729, Coal Ash Management Act of 2014, that momentarily changed late Thursday night on July 31 when the Senate said that it would concur on the House’s version of the bill. When the Senate came back after midnight to complete its final vote on the budget, however, Sen. Tom Apodaca, R-Henderson, announced that the Senate was no longer in agreement. The Senate blamed the House for the failure to reach a deal, while the House blamed the Senate. Rep. Ruth Samuelson, R-Mecklenburg, told the News & Observer that it complicated the process to come to an agreement with the Senate adjourning on Friday. Apodaca sent forth an amendment to the Adjournment Resolution stating that the legislature may take up coal ash issues at its November special session.

Following the impasse with the House and Senate, the governor issued Executive Order 62, which instructs the Department of Environment and Natural Resources to conduct groundwater monitoring at all 33 coal ash ponds at 14 sites throughout the state.

Economic Development Measures Remain Influx

The House and Senate passed competing economic development bills, which remain in limbo. The bills, which have not passed both the House and Senate, include several provisions impacting the Department of Commerce. House Bill 1224, Local Sales Tax Options/Economic Development Changes has passed the Senate and includes the local sales tax provisions and tax incentives EXCEPT for film incentives and historic preservation tax credits. Senate Bill 763, Revenue Laws Technical Changes has passed the House and includes the film tax credits and historical preservation tax credits, EXCLUDING the local sales tax provisions and Department of Commerce provisions.

Highlights of those provisions in limbo include:

  • Department of Commerce Job Catalyst Fund
    The $20 million “closing fund” for the Department of Commerce allows up-front cash incentives to companies considering a major economic development project in North Carolina. The funds would allow companies to use the money for acquiring land, developing facilities or buying equipment. The fund is a priority for Governor Pat McCrory and his administration.
  • Film Incentives
    The House passed a bill that would extend the current film incentives program for a year with minor changes, but the Senate “adjourned” without considering the package. Rep. Ted David, R-New Hanover, passed the amendment through a technical corrections bill (Senate Bill 763) to extend the existing refundable film tax credit program for a year – to January 1, 2016 – while reducing the rebate available to film production companies from 25 percent of expenses to 22.5 percent. The amendment also would cap spending on the credit next year at $40 million and require the Program Evaluation Division to study the return on investment from the program. The amendment passed 77-36, after House Speaker Thom Tillis, R-Mecklenburg, put his support behind it in a rare speech on the House floor.
  • Local Sales Tax Cap
    A compromise was reached that caps the maximum local sales tax for counties at 2.5 percent. While the legislation would provide most counties the capability to raise sales taxes without a referendum, it would restrict the taxing ability of four of North Carolina’s urban counties: Wake, Mecklenburg, Guilford and Forsyth. Two other urban counties, Durham and Orange, already have their local sales tax set at 2.75 percent and were grandfathered in. The compromise version of the bill will now allow those four counties to raise their tax cap up to 2.75 percent, but only if voters agree to a quarter-cent increase by the end of 2014.
  • Historic Preservation Tax Credit
    The House voted to retain the historic property redevelopment tax credit, but the Senate did not vote before “leaving.” The program provides an income tax credit for development of historic properties and is scheduled to expire January 1, 2015. The House voted for an extension of a reduced version of the tax credit to January 1, 2020.

House and Senate Pass Tort Reform Measures

Before the House and Senate “left” Raleigh, they passed a comprehensive tort reform measure, Senate Bill 648, NC Commerce Protection Act of 2014. The bill includes the following provisions:

  • Private Attorney Contracting by Attorney General
    Transparency in Private Attorney Contracting (TIPAC) provides that state-awarded contingency fee contracts are open and transparent and that the state shall receive maximum practicable amount of any settlement or award.
  • Patent Protection
    Strengthens protections against abusive patent assertion claims.
  • Asbestos-Related Liabilities
    Limits the liability of companies that assumed or incurred asbestos-related successor liabilities through operation of law, including a merger or consolidation when the company incurred such liability prior to January 1, 1972. 


Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, July 28, 2014
July 28, 2014 Legislative Update

White Smoke on Budget Compromise…?

It appears that budget negotiations may be coming to an end soon. Senate and House leaders announced the deal Saturday (7/26) evening through social media that a budget framework had been agreed upon between budget conferees and final details were expected to be unveiled this week. Although details are not yet finalized, top negotiators have said that the $21 billion budget will provide seven percent average raises for teachers, while preserving teaching assistant positions in lower grades. However, the budget would take away some of the flexibility school districts had to use money allotted for teacher assistants for other expenses. Medicaid spending will be cut by $135 million but the cut details will be left to budget subcommittee leaders to work out.

Leaders in both chambers said they expected a completed budget to be made public early in the week, in time for votes on Thursday and Friday if all goes as planned.

Senate Passes Local Sales Tax & Economic Development Package

The Senate passed a revised version of HB 1224, Local Sales Tax for Education/Economic Development Changes, which caps local sales tax rates at 2.5 percent. The legislation would allow local governments to put referenda before voters asking them to approve raising sales taxes in quarter-cent increments for either general purposes, education, transportation, or a combination of the three.

The bill also creates a new state fund to attract jobs, the Job Catalyst Fund. The purpose of the Job Catalyst Fund will be to provide funds to a local government for projects that result in the creation of jobs. Businesses who receive these funds must agree to create and maintain a specific amount of jobs, depending on the county’s tier, for a minimum of 10 years.

The bill is scheduled to be heard in the House Finance Committee on Wednesday, July 30th.

Senate Moves Forward on Medicaid Reform

The Senate gave tentative approval to House Bill 1181, NC Medicaid Modernization, a bill designed to reform the state’s Medicaid system. The Senate’s version of Medicaid reform removes Medicaid from the NC Department of Health & Human Services and creates a separate agency called the Department of Medical Benefits. The legislation will also divide the state into regions that would contain both local provider-led organizations and managed care organizations. The provider-led organizations and managed care organizations in each region would compete for contracts.

The bill passed on second reading 28-16, passing largely on party lines, aside from Senators Wesley Meredith (R-Cumberland) and Jeff Tarte (R-Mecklenburg), who voted on the opposing side. After the Senate gives final approval to the bill on Monday, July 28th, it will go back to the House.

It is expected that the House will not accept the Senate’s version of Medicaid reform, as they differ on several large points. The House’s version does not create a new agency for Medicaid and also plans for provider-led accountable care organizations. If the House rejects the Senate’s version, it will go to conference committee for negotiations.

End of Session & Remaining Bills

Once the budget is finalized, the General Assembly will wind down this year’s “short session” and adjourn until January 2015. There are several bills that are on the table for negotiation before they adjourn. Several high-level bills are pending in conference committee, including coal ash, tort reform and regulatory reform. Those high profiles bills that are still pending before adjournment include:

  • Medicaid Reform: The House and Senate disagree on reform measures for the state’s Medicaid system. It's unlikely the House will simply accept the Medicaid reform bill Senators are scheduled to send to the House tonight (7/28).
  • Coal ash: Lawmakers are trying to bridge the differences on a plan to clean up coal ash ponds. A Senate version of the plan would prescribe tighter deadlines than called for by the House.
  • Film Credits:  The state's film incentives program will expire at the end of the year. The governor, Senate and House all have put forward plans to help keep the industry here, but it's unclear what the final plan might be.
  • Regulatory Reform:  Both the House and Senate have passed competing regulatory reform measures.

Regulatory Reform

H1031

NC Economic Development-Department of Commerce Reorganization

Ratified; Signed by Governor

H1109/S779

Clarify Existing Rules Re-adoption Process

Passed House; Senate Rules/Senate Judiciary I

H1152

Eliminate Obsolete Boards & Commissions

Passed House; Senate Rules

H1163/S776

Streamline Rule-Making Process

House Rules/Senate Judiciary I

S729

Coal Ash Management Act of 2014

Passed Senate; Passed House;
Conference Committee

S734

Regulatory Reform Act of 2014

Passed Senate; Passed House; Senate Ways & Means

Taxes

H1050

Omnibus Tax Changes

Ratified; Signed by Governor

S795

Local Option Sales Tax

Senate Local Government

Transportation

S827

DOT Partnerships with Private Developers

Senate Transportation

S848

Infrastructure Reimbursement Agreement

Ratified

Education

H1055

UNC-Charlotte
Renewable Energy Research

House Appropriations

H1061/S812

Replace Common Core

Ratified; Signed by Governor

H1182

UNC Non-Appropriated Capital Projects

Ratified ; Signed by Governor

Job Creation

H1068/S838

Increase Minimum Wage

House Commerce/Senate Rules

H1078

Business Court Judges/End Special Superior Court Judges

House Appropriations

H1135

Business Facilities Development

House Commerce

H1142

Modify Film/Historic Rehab Tax Credits

House Finance

S648

NC Commerce Protection Act of 2014

Conference Committee

H1224

JMAC Development & Fund Modifications

Passed House; Senate Finance

S786

Energy Modernization Act of 2014

Ratified; Signed by Governor

S853

Business Court Modernization

Passed Senate; Passed House; Senate Rules

 

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, July 21, 2014
July 21, 2014 Legislative Update

General Assembly Leaving Raleigh This Week?

The adjournment of the General Assembly has been rumored to happen several dates since before July 4th but with ongoing budget negotiations stalling between the House and Senate, this year’s “short session” has continued longer than legislators originally anticipated. The House last week signaled a possible adjournment this week, filing an adjournment resolution for Friday, July 25th. The adjournment date is a guess with the coal ash bill still pending and the House and Senate continuing to attempt to come to an agreement on the budget spending plan.

House Speaker Tillis said late last week that the possibility remains that lawmakers will adjourn for the year without making budget adjustments for this fiscal year, which began July 1st. Last week the Senate unveiled a new budget proposal, compromising on teacher raises, giving them an 8 percent rather than 11 percent raise. Speaker Tillis however said the House has no plans to budge from providing the 6 percent raises for teachers. The Speaker has said the Senate proposal(s) would mean layoffs of teachers and teacher assistants in order to offer the higher raises. Senate Majority Leader, Harry Brown (R-Onslow) has said “The Senate has tried to make a leap and come to a compromise.”

Budget negotiations will continue this week, as well as a flurry of activity with outstanding legislation as lawmakers work towards adjourning.

Governor Receives New Common Core Package

As last reported, the House and Senate came to an agreement on their differences over how to replace the Common Core standards in North Carolina. The House and Senate said they settled upon a plan that favors the Senate’s plan more but still represents a move to replace the standards. Both chambers had already agreed on a plan to create a new commission to study and recommend new academic standards. However, the chambers didn’t agree on what the commission was allowed to recommend: The House banned the commission from recommending any part of the Common Core standards for the new standards, while the Senate allowed for parts of the standards to be recommended if the commission found them to be the best.

Following the Senate’s vote, the House passed the compromise bill and it is now on the Governor’s desk, who recently announced his intentions of signing into law. Governor McCrory released a statement saying, "I will sign this bill because it does not change any of North Carolina's education standards. It does initiate a much-needed, comprehensive and thorough review of standards. No standards will change without the approval of the State Board of Education."

Film Incentives Headed Towards Grant Program

As the House and Senate continue budget negotiations, the fate of film incentives appear to be headed towards a grant program. A $20 million grant program is included in recent budget offers. The proposal is to create a discretionary grant program under the Department of Commerce. To be eligible, a feature film would have to spend at least $10 million in North Carolina. TV series would have to spend $1 million per episode, and commercials spending $500,000. Grants would be capped at $5 million per film and or TV series and $250,000 for commercials. The current cap is $20 million per production. House Speaker Thom Tillis said late last week that the state's current film incentives program likely would be replaced by a grant program for film production companies. "The sense that I get is that that's the only direction that the Senate wants to go, and I'm working with my caucus to see if we can support that.”

New Economic Development Package Unveiled

The Senate Finance committee passed a revised version of HB 1224, Local Sales Tax for Education/Economic Development Changes, which prevents counties from raising sales taxes to pay for both public education and public transportation. The legislation says that counties can raise taxes specifically for transit or for education, but not for both. It caps local sales tax rates at 2.5 cents per dollar. Though it spells out the amount eligible for use on education and transit, the bill allows for more flexibility on how to use sales tax revenue overall.  The bill has stirred controversy in Mecklenburg and Wake counties, where proposals for a referendum in November would raise both counties’ tax rates by ¼ cent to fund education.

The bill also creates a new state fund to attract jobs, the Job Catalyst Fund. The purpose of the Job Catalyst Fund will be to provide funds to a local government for projects that result in the creation of jobs. Businesses who receive these funds must agree to create and maintain a specific amount of jobs, depending on the county’s tier, for a minimum of 10 years.

Although HB 1224 already passed the Senate Finance committee this week, it was re-referred back to committee. The bill also still needs full House and Senate approval, along with the Governor’s signature, before the end of short session in order to become law.

Crowdfunding & Access to Capital Packages Move Forward

HB 680 , Start-Ups Act/New Markets Tax Credit Act, passed the Senate Commerce Committee. The legislation allows NC residents to invest small amounts in new in-state ventures through crowdfunding. It paves the way for companies to raise up to $1 million in capital, and $2 million if they have undergone a financial audit, through “unregistered securities.” These companies would have the ability to sell shares, mainly online, directly to small investors, rather than through the stock market. The bill caps each investor’s purchase to $2,000 in “unregistered securities” unless that person is an “accredited investor.” Accredited investor implies a level of financial savvy and stability of funds to have enough money to risk.

At the federal level, Congress has passed a federal crowdfunding law that would ordinarily govern these types of transactions, but the responsible agency has yet to adopt rules necessary to put the law in place. At the state level, the Secretary of State’s Office would oversee the transactions and collect quarterly reports.

The second half of the bill focuses on the New Markets Tax Credit, which bill sponsor, Sen. Rick Gunn, R-Alamance, said would help entice $208.3 million in investments to the state. Currently the state levies a gross premiums tax on insurance companies for the privilege of doing business in NC. This bill would give those insurers a tax credit in exchange for investing in qualified small businesses that may not be able to find capital otherwise.

Language in the bill requires that 75 percent of the money raised would have to go to the most economically distressed counties. While similar to the federal new markets credit, the state proposed language does not rely on the federal measure.

The bill passed committee with strong bi-partisan support this week, and now sits in Senate Finance for consideration.

Medicaid Reform Negotiations Continue

State lawmakers worked rigorously this week to in an attempt to tackle the state’s Medicaid problems. The legislature is trying to reform the state’s Medicaid program so that there will be better cost predictability. The $13 billion program that covers about 1.7 million North Carolinians has run over budget the past four years.

Despite heavy opposition from the House, Governor and a large portion of the medical community, the Senate’s Medicaid proposal overcame a hurdle on the floor Thursday. A Senate committee recommended a version of the HB 1181, NC Medicaid Modernization, which would shift Medicaid to a managed-care model. The proposal calls for provider-led and commercial managed care organizations to compete for enrollees within designated regions, with the provider-led plans being responsible for their cost overruns by 2018.

The Senate plan also calls for the creation of a new department, the Department of Medical Benefits. Under this plan, the DMB would be in charge of operating the state’s Medicaid and NC Health Choice programs. Also, instead of an appointed Secretary to head the Department, a Board would be established, consisting of seven members all appointed by the Governor and General Assembly. The House has embraced the Accountable Care Organizations model, which would reward doctors and hospitals in the provider-run networks for meeting patient health goals while saving money The House’s timeline is also less aggressive than the Senate’s timeline, requiring providers to take all risk for overruns by 2020, rather than 2018. The House plan is backed by the state’s major health care providers, including hospitals and doctors. Governor McCrory also champions this proposal. In fact, the Governor showed opposition to the other chamber’s proposal, stating “The Senate’s proposed bureaucratic reorganization is impractical and undermines the progress that has been made during the past year and a half. This legislative overreach also raises some serious constitutional issues and should not be raised in the closing days of the short session.”

Regulatory Reform

H1031

NC Economic Development-Department of Commerce Reorganization

Ratified; Signed by Governor

H1109/S779

Clarify Existing Rules Re-adoption Process

Passed House; Senate Rules/Senate Judiciary I

H1152

Eliminate Obsolete Boards & Commissions

Passed House; Senate Rules

H1163/S776

Streamline Rule-Making Process

House Rules/Senate Judiciary I

S729

Coal Ash Management Act of 2014

Passed Senate; Passed House;
Conference Committee

S734

Regulatory Reform Act of 2014

Passed Senate; Passed House; Senate Ways & Means

Taxes

H1050

Omnibus Tax Changes

Ratified; Signed by Governor

S795

Local Option Sales Tax

Senate Local Government

Transportation

S827

DOT Partnerships with Private Developers

Senate Transportation

S848

Infrastructure Reimbursement Agreement

Ratified

Education

H1055

UNC-Charlotte
Renewable Energy Research

House Appropriations

H1061/S812

Replace Common Core

Conference Committee; Passed House; Passed Senate

H1182

UNC Non-Appropriated Capital Projects

Ratified ; Signed by Governor

 

Job Creation

H1068/S838

Increase Minimum Wage

House Commerce/Senate Rules

H1078

Business Court Judges/End Special Superior Court Judges

House Appropriations

H1135

Business Facilities Development

House Commerce

H1142

Modify Film/Historic Rehab Tax Credits

House Finance

S648

NC Commerce Protection Act of 2014

Conference Committee

H1224

JMAC Development & Fund Modifications

Passed House; Senate Finance

S786

Energy Modernization Act of 2014

Ratified; Signed by Governor

S853

Business Court Modernization

Passed Senate; Passed House

 

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